Leather Industry Insurance Claim: SC Calls for New Assessment of Damages by NCDRC.


07 April 2025 Civil Appeals >> Civil & Consumer Law   |   Consumer Protection Act >> Consumer Rights  

The Supreme Court of India has partially allowed an appeal filed by United India Insurance Co. Ltd. against a judgment by the National Consumer Disputes Redressal Commission (NCDRC). The NCDRC had directed the insurance company to pay Rs. 46,97,085/- with interest to M/s. Park Leather Industries Ltd. for damages caused to its factory shed due to heavy rainfall in 2005, based on the assessment of a surveyor appointed by the leather company.

While the insurance company did not contest its liability to pay compensation, it challenged the quantum awarded by the NCDRC. The Supreme Court found merit in this contention, observing that the NCDRC had erroneously relied solely on the insurance company's alleged failure to dispute the assessment of the respondent's surveyor in its written statement. The court pointed out that this surveyor's report was submitted by the leather company for the first time in its rejoinder, making it impossible for the insurer to have addressed it in the initial written statement.


 

 

The Supreme Court noted that the insurance company's own surveyor had assessed the loss at a significantly lower amount of Rs. 8,89,176/-. The NCDRC, therefore, should not have assumed the insurer's acceptance of the higher figure without independent evaluation. The court held that the NCDRC failed to apply its own mind to the quantification of the claim.

Consequently, the Supreme Court remitted the matter back to the NCDRC for a fresh consideration of the quantum of compensation payable to M/s. Park Leather Industries Ltd. The NCDRC has been requested to prioritize and expeditiously dispose of the case, which dates back to 2008, after allowing both parties to present evidence on the extent of the loss.

The Rs. 63,60,833/- deposited by the insurance company with the Supreme Court's registry will be transferred to the NCDRC and kept in a fixed deposit pending the final decision. The parties will bear their own costs.


Section 23, Consumer Protection Act - 1986  

Consumer Protection Act, 1986